Colliers International has extended its management services agreement with Global CEO Jay Hennick by four years in a move the firm says will "propel growth" and shareholder value.
The agreement with Hennick, who founded Colliers' former parent company FirstService, was due to expire in April 2026 but will now extend to Jan. 1, 2029. He also serves as Colliers' chairman and is its largest shareholder.
Colliers, the fourth-largest global commercial real estate brokerage by revenue, said Canadian Hennick has been instrumental in shaping the business since his FirstService company's first acquisition of a major slice of the global business in 2004.
Colliers’ move to extend Hennick’s contract comes as the world’s largest commercial property firms prepare for what they expect to be a bounce back in business after a rough couple of years when deal levels and revenue dropped. Two of Colliers’ major rivals, Newmark and CBRE, also recently worked on agreements to retain their CEOs.
Colliers said the company has subsequently expanded operations globally, diversified its business and increased recurring earnings to 70%. Since Colliers became a standalone public company in 2015, a move Hennick oversaw, the value of its outstanding shares of stock jumped from approximately $1.5 billion to $6.1 billion as of Dec. 2023.
The Toronto-based firm said as part of the agreement it has created a new performance-based long-term incentive plan that ties a significant proportion of Hennick’s total compensation to specific financial growth targets. Under this arrangement, Hennick has been granted a total of 428,174 cash-settled performance units that are subject to meeting performance-based vesting conditions.
Ambitious goals
For the full amount of the units to vest, the value of Colliers’ outstanding stock would have to increase to approximately $12.3 billion, double the amount of where it stood on Dec. 31. The current total value of Colliers' outstanding shares of stock is about $7.55 billion.
“On behalf of the Board, we are excited about securing Jay’s continued leadership, vision and tireless devotion to Colliers’ growth and value creation over the next five years,” said Jack Curtin, Colliers’ lead director in a statement. “With the implementation of this new long-term performance-based compensation plan, we believe that Colliers will be best positioned to continue delivering exceptional shareholder returns for many years to come.”
Hennick founded property management business FirstService Corporation, the former parent company of Colliers International, in 1989. FirstService bought Vancouver-based commercial real estate adviser Colliers Macaulay Nicolls, or CMN,, the largest shareholder in Colliers International, in 2004 and subsequently added Colliers' businesses in the United Kingdom and the United States.
Hennick is the controlling shareholder of Colliers International and the largest individual shareholder of FirstService. He is also the chairman of Hennick & Co., a private family investment firm. He served as CEO of FirstService until 2015 when he led the separation of FirstService and Colliers into two publicly traded companies. He subsequently replaced Douglas Frye as CEO of Colliers. The spin-off of Colliers established it as one of the leading publicly traded commercial real estate firms in the world.
Colliers doubled its profit in the second quarter as leasing revenue exceeded expectations in a sign of rebounding demand, as reported.
Competitors reward CEOs
As for its competitors, in August, Newmark extended CEO Barry Gosin's employment for the next three years at an annual pay of $17.5 million. The New York City-based firm said Gosin and Newmark Partners and Newmark Holdings entered into an amended and restated deal through Dec. 31, 2026, according to a filing with the U.S. Securities and Exchange Commission.
Newmark’s compensation committee approved his amended employment deal "after careful consideration of Mr. Gosin’s contributions to the company," according to the SEC filing. Newmark reported on Aug. 7 that its year-over-year profit more than doubled to $14.3 million in the second quarter as increases in fee revenue from sales, leasing and mortgage origination and servicing fueled its business.
Under the new employment agreement, "Mr. Gosin’s annual total contractual compensation would be $17,500,000 for each of calendar years 2024, 2025, and 2026," according to the SEC filing.
In 2022, CBRE made a move similar to the one Newmark exercised this week with Gosin when it increased CEO and President Bob Sulentic's target total compensation for that year to $18.5 million.
Also, CBRE's compensation committee approved a one-time equity grant for Sulentic with the target grant value of $7.5 million and a five-year vesting period, according to an SEC filing in February 2022.
"Under Mr. Sulentic’s leadership, the company successfully navigated the global pandemic, as reflected in its key financial metrics reaching new record highs in 2021, and begins 2022 with an enhanced management team, focused strategy, strong balance sheet with significant liquidity, while being well-positioned for future profitable growth through its diversification across asset types, business lines, clients and geographies," CBRE said in the SEC filing.
CoStar News writer Tony Wilbert contributed this this report.